How will the Dobbs Decision Shape the “Business Climate” Debate in the U.S.?

August 4, 2022

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Update: A few days after this blog was published, the pharmaceutical firm Eli Lilly & Co. issued a statement in response to Indiana becoming the first state to pass a new, highly restrictive antiabortion law since the Dobbs decision. The statement said, in part, that the legislation will hinder “Lilly’s — and Indiana’s — ability to attract diverse scientific, engineering and business talent from around the world.” Some media outlets noted, however, that Eli Lilly only spoke out after the legislation passed, that in the past it had given campaign contributions to elected officials who voted in favor of the legislation, and that it was missing from a list of nearly 300 Indiana businesses publicly opposing the measure. Eli Lilly has roughly 10,000 employees in Indiana.

The U.S. Supreme Court’s decision on Dobbs vs. Jackson Women’s Health Organization, allowing states to ban or severely restrict access to abortions, is already creating healthcare barriers to women in many states, with more state restrictions likely to be introduced soon.  Since women are active participants in our economy – as workers, managers,  board members, and business owners – Good Jobs First is exploring the “business climate” fallout. Will abortion access become an issue when companies decide where to start up, expand or relocate?  

Early signals are mixed on whether Dobbs will become a bigger and more enduring issue than LGBTQ rights and other culture-war debates. The collective corporate response has been comparatively muted while the public debate is mostly playing out among politicians. Several states that allow abortion are actively soliciting companies to move or stay based on their pro-choice policies. By contrast, elected officials in some anti-abortion states are doubling down, proposing to use the leverage of procurement dollars and economic development incentives to deter companies from even providing travel benefits to workers seeking abortions. 

For example, some Texas lawmakers are looking at every nook of state authority to curb abortion access, and to punish companies that help facilitate it. State Representative Briscoe Cain sent letters to Lyft and Citigroup threatening to ban them from conducting business in Texas if the companies proceed with their plans to reimburse employees for abortion-related travel expenses; the Texas Freedom Caucus, made up of 11 state representatives, sent a letter to a law firm threatening disbarment if it didn’t rescind its offer to reimburse their employees for out of state abortions. The same lawmakers also plan to introduce legislation that would prohibit local governments in Texas from contracting with companies that reimburse employees for abortion-related expenses. Texas Attorney General Ken Paxton unveiled plans to fine companies $100,000 for every abortion they help pay for.  

At the other end of the debate are some states seeking to codify abortion rights and access. California’s Governor Gavin Newsom has pledged special consideration for companies leaving states with anti-abortion or anti-LGBTQ laws. Other governors, like Connecticut’s Ned Lamont and New Jersey’s Phil Murphy, are touting their states as safe havens from states which restrict access to abortions. Murphy reportedly sent seven letters to Georgia-based firms urging them to relocate to New Jersey; World Business Chicago sent 335 letters to CEOs around the country.  

Of course, the pandemic-induced surge in telecommuting will affect some companies’ decision matrices, and those of some workers, too. Companies are sending mixed signals. Some companies, such as Google, Microsoft, Apple, Meta, DoorDash, and Duolingo have pledged to support workers’ access to out of state abortions. The forms of support vary, but generally includes reimbursing workers for their travel and time off, allowing them to relocate to a preferred state without providing an official reason, or allowing employees to work remotely permanently. 

However, the physical relocation of workplaces has not yet been publicly announced and seldom threatened, our scan of news reports finds to date. A prominent exception is DuoLingo, whose CEO tweeted at Pennsylvania legislators: “If PA makes abortion illegal, we won’t be able to attract talent and we’ll have to grow our offices elsewhere.” We would add that companies are secretive when planning relocations, using the control of information for many purposes, including minimizing harm to employee morale.  

A poll conducted by the pro-choice Tara Foundation and PerryUndem suggests that two-thirds of college-educated workers will not take a job in a state that prohibits abortion after six gestational weeks. 

However, the vast majority of companies have remained publicly silent on the issue, with some announcing new policies only through internal memos.  

Many more effects with large potential impacts remain to be measured. Will Dobbs affect where some people chose to go to college or pursue graduate degrees? Some medical students are reportedly opting to not study in restrictive states for fear of not receiving the proper training related to reproductive healthcare. Will Dobbs have a greater effect on younger workers of child-bearing age, and the greatest long-term increases in personal income/buying power? Will women-oriented and/or women-owned firms make decisions based on abortion policies in their states? And how will Dobbs affect decisions by conservative and/or evangelical proprietors?  

One thing is for sure: with the Baby Boom cohort finishing its exit over the next decade, labor shortages will remain chronic. Labor supply will remain a top corporate site location imperative (as it already was before the Great Resignation). If Dobbs affects a state’s talent supply, it will unavoidably become a “business climate” issue.